Apple supplier Foxconn’s failed India chip venture shows how tough it is for new players

Published

2 years ago

July 24, 2023

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This month, Foxconn pulled out of its joint venture with Vedanta. The two sides “mutually agreed to part ways,” Foxconn said in a statement at the time.

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Foxconn is best known as the main assembler of Apple’s iPhones. But in last couple of years, the Taiwanese firm has made a push into semiconductors, betting that the rise of technologies like artificial intelligence will boost demand for these chips.

But Foxconn’s semiconductor foray has had a tough start, highlighting the difficulty for new players to enter a market dominated by established firms with huge experience and a highly intricate supply chain.

“The industry presents newcomers with high barriers to entry, mainly high levels of capital intensity and access to coveted intellectual property,” Gabriel Perez, ICT analyst at BMI, a unit at Fitch Group, told CNBC via email.

“Established players such as TSMC, Samsung or Micron count with several decades of R&D (research and development), process engineering and trillions of dollars in investment to reach their current capabilities.”

Why is Foxconn getting into semiconductors?

Foxconn, officially known as Hon Hai Technology Group, is a contract electronics manufacturer that assembles consumer products like iPhones. But in the last two years, it has stepped up its presence in semiconductors.

In May 2021, it formed a joint venture with Yageo Corporation, which makes various types of electronic components. That same year, Foxconn bought a chip plant from Taiwanese chipmaker Macronix.

The biggest ramp-up in effort came last year when Foxconn agreed with Indian metals-to-oil conglomerate Vedanta to set up a semiconductor and display production plant in India as part of a $19.5 billion joint venture.

Why India?

Foxconn looked to India for its joint venture with Vedanta because the country’s government is looking to boost its domestic semiconductor industry and bring manufacturing on shore.

“Foxconn’s decision to establish a JV in India responds to two key trends – one of them being the market’s growing role as a consumer electronics manufacturing hub, the second one being India’s ambitions – mirroring other major markets such as the US, the EU and Mainland China – to develop its domestic semiconductor industry through public subsidies and regulatory incentives,” BMI’s Perez said.

What went wrong for Foxconn?

This month, Foxconn pulled out of its joint venture with Vedanta. The two sides “mutually agreed to part ways,” Foxconn said in a statement at the time.

“There was recognition from both sides that the project was not moving fast enough, there were challenging gaps we were not able to smoothly overcome, as well as external issues unrelated to the project,” Foxconn said.

Deadlocked talks with European chipmaker STMicroelectronics, which was the technology partner for the project, was one major reason for the venture’s failure, Reuters reported this month.

Foxconn and Vedanta wanted to license the technology from STMicro and India wanted the firm to have a stake in the joint venture, but the European chipmaker did not, Reuters reported.

It’s hard to break into chipmaking

Foxconn’s hurdles point to a broader issue — it’s hard for newcomers to get into semiconductor manufacturing.

The manufacturing of chips is dominated by one player — Taiwan Semiconductor Manufacturing Company, better known as TSMC — which has a 59% market share in the foundry segment, according to Counterpoint Research.

TSMC doesn’t design its own chips. Instead, it makes these components for other companies like Apple. TSMC has had more than two decades of experience and billions of dollars of investment to get to where it is.

TSMC also relies on a complex supply chain of companies that make critical tools to allow it to manufacture the most advanced chips in the world.

Foxconn and Vedanta’s effort appeared to rely heavily on STMicro, but once the European company bailed, the joint venture was without much expertise in semiconductors.

“Both companies … lacked the core competency of manufacturing a chip,” Counterpoint Research’s Shah said, adding that they were dependent on third-party technology and intellectual property.

Foxconn’s attempts to crack the semiconductor space highlight how difficult it is for a new entrant to do so — even for a $47.9 billion giant.

“The semiconductor market is highly concentrated with few players which have taken more than two decades to evolve to this point,” Shah said, adding that there are high barriers to entry, such as large amounts of investment and specialized labor.

“On an average, it takes more than two decades to be at the level of skill and scale to be a successful semiconductor manufacturing (fab) company.”

Technology

Oracle stock jumps after $30 billion annual cloud deal revealed in filing

Published

4 hours ago

June 30, 2025

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Oracle stock jumps after billion annual cloud deal revealed in filing

Oracle CEO Safra Catz speaks at the FII PRIORITY Summit in Miami Beach, Florida, on Feb. 20, 2025.

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Oracle shares jumped more than 5% after a recent filing showed a cloud deal that would add over $30 billion annually.

CEO Safra Catz is slated to share the deal news at a company meeting Monday, according to a filing with the Securities and Exchange Commission. The revenues are expected to start hitting in the 2028 fiscal year.

“Oracle is off to a strong start in FY26,” Catz is expected to say, according to the filing. “Our MultiCloud database revenue continues to grow at over 100%, and we signed multiple large cloud services agreements including one that is expected to contribute more than $30 billion in annual revenue starting in FY28.”

The deals revealed Monday by Catz will not affect the company’s 2026 guidance, according to the filing.

Trump says he has group of ‘very wealthy people’ ready to buy TikTok

Published

14 hours ago

June 30, 2025

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Trump says he has group of ‘very wealthy people’ ready to buy TikTok

U.S. President Donald Trump announced on April 4 that he would again postpone enforcement of a law banning TikTok unless its Chinese owner ByteDance divests from the platform.

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U.S. President Donald Trump told Fox News in an interview aired on Sunday that he has a group of “very wealthy people” ready to buy TikTok, whose identities he can reveal in about two weeks.

Trump added that the deal will probably need Beijing’s approval to move forward, but said “I think President Xi will probably do it,” in reference to China’s leader Xi Jinping.

The president made the off-the-cuff remarks while discussing the possibility of another pause of his “reciprocal” tariffs on Fox News’ “Sunday Morning Futures with Maria Bartiromo.”

Tiktok’s fate in the U.S. has been in doubt since the approval of a law in 2024 that sought to ban the platform unless its Chinese owner, ByteDance, divested from it. The legislation was driven by concerns that the Chinese government could manipulate content and access sensitive data from American users.

Earlier this month, Trump extended the deadline for ByteDance to divest from the platform’s U.S. business. It was his third extension since the Supreme Court upheld the TikTok law just a few days before Trump’s second presidential inauguration in January. The new deadline is Sept. 17.

The Protecting Americans from Foreign Adversary Controlled Applications Act, of PAFACA, had originally been set to take effect on Jan. 19, after which app store operators and internet service providers would be penalized for supporting TikTok.

TikTok went dark in the U.S. ahead of the original deadline, but was restored after Trump provided it with assurances on the extension.

Trump, who credited the app with boosting his support among young voters in the last presidential election, has maintained that he would like to see the platform stay afloat under new ownership.

Potential buyers that have voiced interest in the app include Trump insiders such as Oracle’s Larry Ellison to firms like AppLovin and Perplexity AI.

Most of the potential bidders for TikTok don't fit both Washington and Beijing's requirements

However, it’s unclear if ByteDance would be willing to sell the company. Any potential divestiture is likely to require approval from the Chinese government.

A deal that would have spun off TikTok’s U.S. operations and allowed ByteDance to retain a minority position had been in the works in April, but was derailed by the announcement of Donald Trump’s tariffs on China, Reuters reported that month.

The president previously floated a proposal for American stakeholders to buy the company and then sell a 50% stake to the U.S. government as part of a joint venture.

Experts have previously told CNBC that any potential deal could face legal challenges in the U.S., depending on whether it complies with PAFACA.

Technology

Nvidia insiders dump more than $1 billion in stock, according to report

Published

1 day ago

June 29, 2025

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Nvidia insiders dump more than billion in stock, according to report

NVIDIA founder and CEO Jensen Huang speaks during the NVIDIA GTC Paris keynote, part of the 9th edition of the VivaTech technology startup and innovation fair, held at the Dôme de Paris in the Porte de Versailles exhibition center in Paris on June 11, 2025.

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Insiders at artificial intelligence chipmaker Nvidia have dumped more than $1 billion in stock over the last year, according to a report from the Financial Times.

About $500 million worth of sales occurred over the last month as the market notched new highs and shook off geopolitical tensions that had rattled investors, according to the report. The stock is up more than 17% this year despite concerns over curbs limiting AI chip sales overseas and 44% over the last three months.

Securities filings revealed that the tech titan recently unloaded about $15 million worth of shares as part of his more than $900 million plan announced in March to sell up to 6 million shares through the end of the year. Huang’s net worth totals about $138 billion, placing him as 11th on the Bloomberg Billionaires Index.

Last week, the chipmaking giant hit a fresh record and rallied for five straight days following the stock sales and an annual shareholder meeting, where the CEO called robotics the biggest opportunity for the company after AI. That helped the chipmaker regain its seat as the most valuable company ahead Microsoft and Apple.

The FT article cited a report from VerityData, which noted that the jump in shares above $150 prompted the stock dump.

Last year, Huang unloaded more than $700 million in Nvidia shares as part of a prearranged plan.

A Nvidia spokesperson declined to comment on the report.

Read the complete Financial Times report here.